After eating four slices of pizza, you are offered a fifth slice for free. You turn down the fifth slice. Your refusal indicates that the
A) marginal utility for four pizza slices is negative.
B) total utility for five pizza slices is negative.
C) marginal utility is positive for the fourth slice and negative for the fifth slice.
D) marginal utility for the fourth slice is the largest among all slices.

Question

Quizplus · Accepted Answer

The fact that the person turns down the fifth slice indicates that the marginal utility for the fifth slice is negative (meaning the satisfaction gained from consuming that fifth slice is less than the satisfaction gained from consuming the fourth slice). Therefore, the marginal utility for the fourth slice must be positive, otherwise the person would not have consumed it. This makes choice (C) the correct answer. Choice (A) is incorrect because the fact that the person consumed four slices indicates that the marginal utility for those slices was positive (otherwise the person would have stopped after fewer slices). Choice (B) is incorrect because it is not clear from the situation whether the total utility for five slices is negative - it is only clear that the marginal utility for the fifth slice is negative. Choice (D) may or may not be true, as we cannot infer anything about the relative size of marginal utilities for the different slices from the information given.

After Eating Four Slices of Pizza, You Are Offered a Fifth